A rise in the price level
A) increases short-run aggregate supply.
B) decreases short-run aggregate supply.
C) increases aggregate quantity supplied.
D) decreases aggregate quantity supplied.
E) decreases aggregate demand.

Question

Quizplus · Accepted Answer

A rise in the price level increases the aggregate quantity supplied because producers are willing to supply more goods and services at higher prices, reflecting a movement along the short-run aggregate supply curve.

A Rise in the Price Level